Hudson's Bay Company more than doubled sales in the first quarter driven primarily by its acquisition of Saks last year.
Retail sales were $1.9 billion, an increase of $971 million from $884 million for the prior year. Consolidated same-store sales increased by 2.8%, with increases of 2.5% at DSG, 2.6% at Saks Fifth Avenue and 15.1% at Off 5th. Digital commerce sales totaled $207 million, reflecting both the inclusion of Hudson's Bay and Lord & Taylor (which together are referred to as “Department Store Group” or DSG) and Saks.
Sales growth at DSG was driven by menswear and beauty. Sales growth at Saks Fifth Avenue was driven by menswear and accessories. Sales growth at Off 5th was strong across all categories.
Two Off 5th stores opened in Palm Beach, Fla., and Milwaukee, Wis., and two Saks Fifth Avenue locations closed in Orlando, Fla., and Stamford, Conn.
HBC also completed the sale and leaseback of its Queen Street flagship store and Simpson Tower office complex in Toronto for a purchase price of $650 million.
“Overall first quarter performance was in the range of our expectations,” said governor and CEO Richard Baker. “We are encouraged by the business trends witnessed through the quarter, which bode well for the balance of this year. Furthermore, we are pleased by the progress of our integration of Saks, which is on-track to achieve approximately $50 million in HBC synergies targeted for this year. As a result, we are reaffirming our outlook for fiscal 2014 as provided in April.”
Baker said that his confidence in HBC’s future is based upon its core sales growth strategies: driving digital sales across all its banners, growing Off 5th through a modified and more productive format as well as new stores in the U.S. and Canada, bringing Saks Fifth Avenue to Canada and driving outsized growth at the top doors of each of its banners.
Hudson’s Bay will also have a new financial chief step into that role June 9. Paul Beesley most recently served in a number of executive roles with Empire Company Limited, a corporation with annual sales in excess of $19 billion and operations in retailing and related real estate, from 2000 to 2014, including as chief corporate development officer of its Sobeys unit and as CFO of Empire. While at Empire, Beesley developed strategies resulting in the acquisitions of Canada Safeway and the remaining stake in Sobeys, led the creation of an Empire-related REIT and facilitated numerous financing transactions.